Canada's Dorel Industries Ltd. said it acquired Cannondale Bicycle Corporation and Sugoi Performance Apparel in an all cash deal valued at $190 million to $200 million. Cannondale and Sugoi are being purchased from an affiliate of Pegasus Capital Advisors, which acquired Cannondale in 2003. Cannondale acquired Sugoi in 2005. In 2007, sales for both companies were approximately $200 million.
Headquartered in Bethel, CN, Cannondale has facilities in Bedford, PA, as well as offices in Canada, Switzerland, Holland, Japan and Australia. The company is well known for being one of the few remaining U.S. brands to make fames in the United States, although it began importing lower-end mountain bike frames from Taiwan last year. The final value of the all-cash transaction will hinge on Cannondale's earnings for the year ending June 30, 2008. The transaction, which will be immediately accretive to Dorel's earnings, is being financed through debt.
As a result of the acquisition, Dorel will split its Recreational/Leisure segment into two distinct operating divisions. A new Dorel Independent Bicycle Dealers (IBD) division, including the Cannondale Sports Group, will focus exclusively on selling premium brands to specialty retailers.
